Markets did not react to the US official crude inventory data, focusing on the omicron case in California, Halley said. Oil finished lower for the day, with Brent crude down 1.70% to $68.95 per barrel and West Texas Intermediate retreating 1.90% to $65.70/b.
In Asian oil markets, Brent crude and WTI rose 1.10% to $69.70/b and $66.40/b, respectively, on soothing comments by Dr. Anthony Fauci, chief medical advisor to President Joe Biden, which lifted US equity futures, according to Halley
However, one negative headline on omicron could wipe that gain out as quickly as it appeared, the analyst noted.
Halley believes that the oil price collapse and uncertainty surrounding omicron could lead OPEC+ to decide to temporarily pause production increases, which could restore a modicum of stability to oil markets.
US Crude Oil Stocks Slide as Gasoline Stocks Rise, EIA Reports
US crude oil stockpiles fell to 433.1 million barrels week-over-week, from 434.0 million barrels a week ago, the US Energy Information Administration reported Wednesday.
Oil stocks in the year-ago period were higher at 488.0 million barrels, according to the report. Crude oil futures averaged $77.47 per barrel in the report week, up from $75.42/b a week ago. In the year-ago period, crude oil futures were at $45.80/b on average, the EIA reported.
Total gasoline stocks rose to 215.4 million barrels from 211.4 million barrels a week ago. Retail average regular gasoline prices decreased to $3.38 per gallon from $3.40/gal a week ago, according to the EIA. Gasoline prices were at $2.12/gal a year earlier, the agency reported.